Why You Should Learn the Playbook: Know the Game Plan for Distressed Acquisitions and Divestitures, Part Three—Sale Terms and Market Considerations

• February 12, 2025

• Jessica Scouten , PYA, PC
• Megan Preusker , Mintz Levin Cohn Ferris Glovsky & Popeo PC
• Ryan K. Cochran , Epstein Becker & Green PC

Negotiating these terms requires a balance of competing interests. The seller seeks terms that ensure the sale of the purchased assets will be to a contractually and financially committed bidder at a price that the seller believes is fair, while preserving the ability of the seller to potentially obtain higher and better offers at an auction for the benefit of the seller and its creditors. Purchasers often seek terms that give them greater exclusivity or protections (a higher break-up fee and a higher initial overbid amount) and reduce their risk (lower deposits, increased closing conditions, and a most favorable closing date). In court-approved sale processes the court is the final arbitrator of the reasonableness of the balance struck by the seller and purchaser, and other parties in interest in the case are given the opportunity to weigh-in.

ARTICLE TAGS

• Business Law and Governance Practice Group
• Health Care Finance and Transactions